$3.9 million approved thus far for downtown revitalization entity

Published 4:49 pm, Tuesday, April 7, 2015

At this point, the vacant courthouse is begging for the wrecking ball and the developers of Hotel Santa Ria are readying to supplant it.

At this point, the vacant courthouse is begging for the wrecking ball and the developers of Hotel Santa Ria are readying to supplant it.

Photo: James Durbin

$3.9 million approved thus far for downtown revitalization entity

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The Tax Increment Reinvestment Zone, a taxing entity that collects property taxes for downtown development, received a one-year expiration to make final incentive deals, due to a 5-2 City Council vote on Aug. 12.

Since then, the board running the TIRZ has already approved $1.1 million for downtown renovation and rehabilitation projects, and $2.8 million more for demolition to make way for a major boutique hotel and asbestos-free downtown real estate.

Money has been allocated to the likes of Basin PBS, the Yucca Theater, Brass Munky, and Susie’s South Forty. And $2.8 million is scheduled to go toward the city of Midland’s asbestos abatement and demolition of the former Midland County Courthouse - the site of proposed Santa Rita Hotel - and two vacant office buildings on West Illinois Avenue.

Now, with five months left and $500,000 left over to allocate before the Sept. 1 expiration, three members on the TIRZ board look back at what has transpired since Aug. 12.

District 2 Councilman and TIRZ board Chairman John Love III was the only council member who was for keeping the TIRZ in operation in August.

“And I’m still in favor for it, especially now that we realize what’s happening with downtown development and the infrastructure problems we have downtown,” Love said.

When the topic of Midland Development Corp. and its ability to incentivize infrastructure improvements was pondered, Love said that was not the intent of the MDC’s original mission. It’s mission was to diversify job opportunities, Love said, but it has strayed into infrastructure development agreements.

“Getting rid of TIRZ, realistically, whether other council members want to admit it or not, tied our hands behind our back,” Love said. “We’ve taken away one of the most valuable downtown economic development tools we’ve ever had because a few individuals either don’t understand or they just don’t like it.”

At-large Councilman and TIRZ board member Scott Dufford, who proposed the one-year expiration during the August 12 council meeting, said he is now torn on the decision he made.

“Just knowing that we have a few downtown projects left, I would rather proposed a two- or three-year sunset as opposed to the one year sunset,” Dufford said. “But I was just fortunate enough to get one.”

Dufford added that the one-year expiration was the best compromise he could have proposed at the time because of the strong feelings of other council members, including those that wanted an immediate end to the TIRZ.

From County Judge and TIRZ board member Mike Bradford’s perspective, the TIRZ was just starting to gain traction right before the expiration vote. The way TIRZ is funded is that it annually collects additional property tax revenue above a property valuation cap that was established in 2001. The revenue process was slow but gradual.

“But like any entity, it (TIRZ) finally had some money in it,” Bradford said.

The lack of funds for years since its formation in 2001 was one of two TIRZ problems Bradford identified. The second problem, which Bradford said he is the first to admit to, is that the TIRZ did not communicate well any updates to City Council.

Bradford forewarned that with the TIRZ going away, it is assured that a tax increase will happen, since that’s where the development money will come from.

“Once a TIRZ is undone, I’ve never seen one put back together,” Bradford added. “For the future of our community and development, I’d be surprised if we see TIRZ again.”

Final TIRZ projects so far:

RITZ Theater - $500,000

MCT/YUCCA Theater - $135,757

Rita Properties (Brass Munky) - $33,305

Susie’s South 40 - $157,372.37

White Star Energy - $39,750

AKA Square, Inc./Honolulu Building - $207,000

Demolition of former Midland County Courthouse, Mid-America Building and Midland Executive Center - $2.8 million